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The requirements on our business changes and if these changes involve impacts that forces us to change our physical fulfilment structure like higher volumes than we cannot handle in our existing location. We might need to find a new home for our fulfilment. If so, what do we need to consider when looking for this new home?

The basic is that any new home must support our fulfilment need today and handle those changes in the future that we can foresee and judge as most likely. The reason it is paramount to look into the future is that a real-estate contract is one of the few contracts that you cannot break, so be careful before you commit your company.

A new location, a new warehouse and maybe a new automated logistic solution can have a big positive impact on our fulfilment and while we explore and work hard to utilize these possibilities we also need to understand the impact our choices have on our company.

The selection of a location can affect your transportation cost for sourcing and distribution. The location normally also have an impact on the lead time to your customers and the forwarders can have different cut off time depending on the location, which in turn can affect your delivery service (your customer promise).

We can look at existing facilities/warehouses often called brown-field, these normally come with some limitations and more often than not demands a higher price per sqm. The limitations can be ceiling hight and less adaptations for your business. The contracts for existing warehouse buildings are typically shorter (from 2 years) than the contracts for building a new warehouse.

We can also look at building a new warehouse, often called green-field, these typically offers a much higher degree of customization and depending on the available “land” can offer a higher flexibility to grow, to extend with a growing business. The contracts are from 10 years or longer. The local regulations have a big impact on how high we can build and also how big a percentage of the surface we can maximum build on, in a specific land slot.

The length of the rental-contract has a direct correlation to the degree of flexibility of the real estate owners, a shorter contract limits the amount of customization. A longer contract for a new warehouse can today often also include the cost for automation within the warehouse, thus financing the automation through the real estate contract.

The paradox with the above mentioned flexibility of the real estate owners is that the longer you sign up for, the less flexibility you get in terms of contract commitment. If we are a growing company then this is why we need to make sure we either have the flexibility within the selected site to grow or we need to have a fulfilment strategy that support us to build new sites as we grow, like Amazon and Zalando.

Whether you go brown or green is less important, the goal is to select the right home in terms of fulfilment impact for your company.

In search of awesomeness / Deliver results / Empowerment

Adviser and Project Management within Supply Chain, Warehousing, Warehouse processes, Distribution and Automation.

anders.anderberg@edgelogx.com

+46 (0)70 – 669 60 10

The pressure to be both more efficient and more environmentally friendly is real, how could automating your packaging process impact this?

Compare manual packing into standardized cartons with the newer automated solutions where the cartons are cut or folded down to save space, the automated solutions normally comes out on top, making it possible to ship less air. Other factors that will impact this are your ability to box-caculate your orders, if you allow products higher than the folding/cutting level, oddly shaped products or forwarders transport weight, length or volume thresholds. 

Compare manual packaging into plastic bags with automated packaging either into plastic bags or cartons, you will most likely see an increase in air shipped. This is due to the fact that the manually packed bags are one of the most volume effective. This doesn’t mean that there isn’t other positive impacts in following the automated road. From an environmental standpoint the cardboard is seen as a more renewable resource, a move from plastic to cardboard will normally have a positive environmental impact, but as always, the degree of re-used material, the end customers city/country’s ability to recycle will impact. 

From a productivity perspective the automated solutions are fast, speeds of between 13-15 packages per minute (!) is common. Being able to produce more with less people also helps to handle peaks in order volume. 

The biggest impact on the bottom line is the efficiency increase the packaging automation enables. If we get a high volume of our orders through the automation it will drop the opex. As with all automation, the targeted process will be a lot more efficient but will also effect the surrounding processes. As we change the way we work in order to get the benefits, this will impact the other processes that are connected to it. When we automated the packaging process we need to make sure that the picking processes works hand in hand with it. Two examples of normal impacts are – one; that the EAN/SKU scan is removed from the packaging, this forces the check of the correct item upstream to the picking process. And two; that we need to introduce the pick to cartons normally with an internal unique ID before the picking process.

Different suppliers of packaging automation have different solutions and concepts and they varies in the characteristics and the impact these give our business. Examples on characteristics are; 

• Paper quality. How thin corrugated papper can the automation handle 
• Degree of volume. How big is the volume scope based on a specific footprint, 
• Flexibility. Possibility to change the footprint after go live 
• Opex. Aftermarked support & consumption cost
• Bells and whistles. Like weight check, content photo, automatic filling material, etc..

As always, we and our supplier need to understand the impact this mechanization makes on our business, as our packaging change into a production line process. By having control of and working with all the characteristics in our new automation we lower the investment risk and get all wrapped up.

Searching for awesomeness to deliver results and empowerment

Adviser and Project Management within Supply Chain, Warehousing, Whse processes, Distribution and Automation.

anders.anderberg@edgelogx.com

The industry is booming, this goes both for the automation industry that targets automation within the warehouse and for the packaging automation industry. 

Automation can make your logistics more efficient and faster. Retailers are changing the operation to omnichannel often with the help of automation and e-commerce with it’s high volume of small orders are early adopters of automation in all different shapes and sizes. 

When we talk about automation in logistics, what do we mean? From a process perspective we take one process and optimize it to make it more efficient.  The interesting part comes next, the way we do it is that we mechanise it, in other words we use equipment to make it faster and more efficient. 

The decision to mechanize the logistics will improve the company’s ability to deliver, but at the same time we are changing the characteristics of the logistics part of the supply chain. These new properties are quite natural, but if we fail to consider them when we make the decision to automate we could be in for a nasty surprise down the road.

The new characteristics we get are mostly dependant on the properties of the selected solution and how we will be using it. Examples of characteristics are; 

• Top Speed. All equipment have its top speed and we need to work with it. It is normally not possible to through loads of people at it and get an increase of output. The most common solution is to extent the working times during peaks, and we need to know how that affects your customer promise and/or your forwarders pick up deadlines.
• Changes. A mechanized solution will make it harder to handle changes. Volume increase are normally the easy one, almost all solution can be extended by purchasing more robots/shuttles/racking but do not forget to consider the required lead times to get it in production. Changes of the order structure and/or customer packaging could be much harder to handle and here it is vital to talk about possible future scenarios before you select a specific solution and then consider the scenarios when you evaluate different solutions/suppliers. The same goes for how much we want to automate, if we only start with automating the storage and want to automate the picking and/or the packaging process, different solutions are easier or harder to extend with these extra processes.

A decision to automate is not to be taken lightly, at the same time we need to keep moving forward and by knowing and working with all the characteristics in our new automation we lower the investment risk and get faster, better and stronger.

Searching for awesomeness to deliver results and empoverment

Adviser and Project Management within Supply Chain, Warehousing, Whse processes, Distribution and Automation.

anders.anderberg@edgelogx.com